British Virgin Islands company law Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.Anti-spam check. Do not fill this in! ==Corporate governance== The business and affairs of a British Virgin Islands company are managed by its [[board of directors]].<ref>BVI Business Companies Act, section 109</ref> The board must consist of one or more persons, and these may be individuals or companies. Directors owe strict duties of good faith to exercise their powers for a proper purpose and in the best interests of the company.<ref>BVI Business Companies Act, section 121</ref> In relative terms, directors are comparatively powerful under British Virgin Islands law. In most cases directors can appoint further directors and amend the company's constitution. There are extremely few matters of corporate governance whereby the board is required to obtain the approval of the company's members. The members of the company are legally the owners of the company. Although they do not have the power to dictate to the directors how the company should be managed,<ref>''[[Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame]]'' [1906] 2 Ch 34</ref> they have the power to appoint and remove the board, and through this power exercise indirect control. Resolutions may be passed by the members formally or informally pursuant to the [[Duomatic principle|''Duomatic'' principle]]. Members typically operate by a simple majority vote (there being no statutory concept of "[[special resolution]]s" in British Virgin Islands law any more), although there are special statutory provisions to protect minority [[shareholder]]s against "unfair prejudice" on the part of majority shareholders,<ref>BVI Business Companies Act, Part XA</ref> and this is largely based upon [[unfair prejudice in United Kingdom company law]]. [[File:Direktorium LDE.jpg|thumb|right|200px|A board of directors may pass resolutions at a meeting (pictured) or by way of circular written resolutions.]] The directors owe their duties to the company itself, and not to the individual members.<ref>''[[Foss v Harbottle]]'' (1843) 67 ER 189</ref> Accordingly, where a director acts in breach of their duty, then the proper claimant in any action is the company itself. If the company is unable to take any action (because it is controlled by the wrongdoer) the court may authorise a member to bring proceedings in the name of the company by way of [[derivative suit|derivative action]].<ref>BVI Business Companies Act, section 184C</ref> However the measure of damages will be the loss to the company, and only the loss to the company. A shareholder cannot sue a person for a wrong committed against the company for the "[[reflective loss]]" to the value of their shareholding, as this would result in the wrongdoer paying double compensation for the same wrong (once to the company and once to the shareholders).<ref>''[[Johnson v Gore Wood & Co]]'' [2002] 2 AC 1</ref> The emphasis of British Virgin Islands company law is to protect the rights of creditors and members (i.e. the sources of capital) as the key stakeholders in the company. The rights of other stakeholders, such as employees, customers and wider society are given comparatively little protection. This reflects the offshore nature of most British Virgin Islands companies, and the different social and economic environments in which they operate. At present there is no securities regulation in relation to public issuance of securities in the British Virgin Islands. Although Part II of the Securities and Investment Business Act, 2010 purports to regulate public issues of securities, this Part has not yet been brought into force (nor has Part V, dealing with [[market abuse]]). Companies in the British Virgin Islands are subject to various statutory record keeping obligations. However, with a few exceptions, there is limited public access to corporate records.<ref>{{cite web|url=http://www.harneys.com/files/record-keeping-obligations-for-bvi-companies,-partnerships,-trusts-and-other-organisations---5660111.pdf|title=Record Keeping Obligations for BVI Companies, Partnerships, Trusts and Other Organisations|publisher=[[Harneys]]|access-date=26 March 2015|archive-url=https://web.archive.org/web/20150924025006/http://www.harneys.com/files/record-keeping-obligations-for-bvi-companies,-partnerships,-trusts-and-other-organisations---5660111.pdf|archive-date=24 September 2015|url-status=dead}}</ref> Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here. You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see Christianpedia:Copyrights for details). Do not submit copyrighted work without permission! Cancel Editing help (opens in new window) Discuss this page